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Some uncertainty remains about big K-12 spending requests for upcoming Indiana budget

By

Indiana Capital Chronicle

 Dec. 29, 2022

Top K-12 education requests for Indiana’s next two-year budget plan center around new spending on literacy improvement initiatives and workforce readiness, as well as an increase to the K-12 tuition support formula.

But the state’s key budget writers have expressed hesitancy about earmarking additional dollars amid inflation.

Some lawmakers have additionally shared their discontent with previous K-12 appropriations, saying the state’s investments in Hoosier schools haven’t best-prepared students for the workforce. Education funding for K-12 schools already is just over half of the state’s $17 billion budget.

Gov. Eric Holcomb told the Indiana Capital Chronicle he’s committed to spending more on education, but that revenue forecasts next April will largely dictate his decision making. The Republican governor is slated to release his legislative priorities Jan. 4.

The upcoming 2023 session — which kicks off Jan. 9 — is expected to bring heated discourse around a myriad of different spending requests. The latest budget forecast showed state lawmakers will have additional money to work with when crafting the budget, but not enough to cover requested agency projects and capital needs.

IDOE requests increases to tuition support funding

Representatives from the Indiana Department of Education (IDOE) outlined the agency’s requests before the Indiana State Budget Committee earlier this month.

Katie Jenner, the state’s secretary of education, said the governor’s proposed budget would include an increase to the state’s tuition support formula, although an exact figure has yet to be made public.

“We absolutely have signaled that we are interested in an increase in tuition support funding, which of course is the formula that includes everything from basic foundation, to career and technical education, to special education, to complexity. We absolutely will be pushing for an increase,” Jenner said later, during a legislative conference in December. “I have a percentage in my mind. And now, I plan to meet with the governor and budget directors, and then of course work with the General Assembly in the coming session.”

Democrats are on board, saying they will push for a substantial tuition support funding boost.

Republican lawmakers say increasing K-12 formula spending is a priority for them, too, but they warn that they don’t have the cash to fund all of the agency’s requests.

In December 2020, a 1% increase in the tuition support formula – which doesn’t guarantee a 1% increase to each school district due to enrollment declines – would cost the state roughly $75 million per year.

In the most recent budget, K-12 tuition support provided by state dollars grew 4.6% in the first year and 4.3% in the second year.

Jenner also emphasized a $5 million funding renewal for Crossing the Finish Line — a state program to cover costs for students who fell a few courses short of completing a degree.

Other IDOE spending requests include those for efforts to train teachers for special education and English learning classes.

Education advocates maintain that Indiana needs to appropriate $122 million more — on top of the $725 million the state currently plans to spend — to adequately fund special education. Fully funding English language learners would cost up to $54 million, double what Indiana appropriates now.

In particular, Jenner said, the state needs to invest in literacy, which fell during the pandemic. She asked lawmakers to at least spend enough to meet an additional $10 million matching grant with Eli Lilly.

“We are presently sitting at a place, as a state, where one in five children are not reading by the end of third grade. I hate sharing that data point with you; our schools don’t love that data point either,” Jenner said when speaking to the state budget committee. “We’re going to do everything we can to make sure that all of our children can read.”

But Sen. Ryan Mishler (above), R-Bremen, said he was skeptical of additional spending when inflation had already hurt the previous cycle’s budget, inflating construction costs on capital improvement projects.

Mishler is the Senate’s budget steward, and said some areas where the legislature had embraced increased spending hadn’t met the state’s needs.

“We invest more and more money in K-12 but all we read about is how the kids are performing worse,” he said.

Indiana Chamber says new funding should help prepare students for jobs

The Indiana Chamber of Commerce continues to maintain that workforce talent — both quantity and quality — remain top concerns for Indiana employers.

Jason Bearce, the chamber’s vice president of education and workforce development, said during a presentation before the Indiana Commission for Higher Education (ICHE) earlier this month that the chamber supports measures to enhance early childcare access and quality. He noted a lack of affordable, high quality child care across Indiana is one of the factors most negatively impacting attracting and retaining workers.

To help, Bearce said the state should expand eligibility for the state-funded On My Way Pre-K program for low-income families, in addition to making tuition-free early learning training credentials eligible for state’s Next Level Jobs funding.

“If you want to keep people on the job consistently, having some reliable affordable childcare or learning is really an important piece of that,” he said. “We are nowhere near where we need to be in terms of increasing access across the state.”

Bearce said the chamber also wants to see lawmakers pass bills to reverse learning loss and increase academic proficiency. He said that can be done by fully funding summer school programs and through state investments to education savings accounts of students who meet academic proficiency benchmarks on standardized tests.

Most of all, the chamber wants the legislature to strengthen college and career readiness opportunities for Indiana students to help fill thousands of skilled worker positions across the state. Bearce said the state already has some useful programs in place, but they aren’t being taken advantage of by Hoosiers.

“How do we evaluate all these state programs (already in place)? There are no incentives for people to take advantage of those,” Bearce said. “These programs are well-intentioned in many cases and can make a huge difference, but people aren’t aware of them, or they don’t have the motivation to take advantage of them.”

Teachers union wants more money for teachers, support staff

Indiana State Teachers Association (ISTA) president Keith Gambill said the largest teachers union in the state is calling on the General Assembly to “provide significantly increased funding to public schools,” especially for teachers and support staff.

“We know the leading reason that folks leave the profession is low pay,” Gambill said during a recent news conference, adding that benefits need to be improved, as well.

Indiana ranks 41st in the nation for average teacher salary, which currently stands at $53,072, according to the National Education Association. That’s just $3,000 more than the “minimum living wage.” Nationally, the average public school teacher salary for the 2020-21 academic year was more than $65,000, however.

Gambill said Indiana made progress two years ago when lawmakers spent nearly $2 billion in new K-12 education funding in the 2021 budget. Now, he said, Indiana needs to continue that progress.

“That has to be sustained and increased,” he said. “If we’re going to work to meet the goals that the governor and the commission that he established set forward, then we can’t stop with where we are.”

Other key ISTA spending requests include:

  • Creating a grant program designed to recruit and retain education support professionals, like bus drivers, food service employees, custodians and administrative staff. That could include dollars for signing bonuses, benefits packages and commercial drivers license certification costs.
  • Amending Indiana law to exempt student loan debt relief from Indiana’s state income taxation.
  • Providing a “meaningful” cost-of living adjustment increase for retired educators.
  • Creating a state-funded program to provide up to 12 weeks of paid parental leave for public school employees.
  • Increases for special education, English language learner, and complexity funding.
  • Funding a universal and free public preschool program within the next three years.
  • Additional scholarship funding for up-and-coming educators.

Where lawmakers and the governor stand

House Speaker Todd Huston and State Senate President Rodric Bray have said they both favor more school funding in the 2023 budget. What the Republican leaders have not disclosed is just how much more money schools may get.

The allocation of dollars will heavily depend on the latest revenue forecast, released earlier this month.

Lawmakers will have roughly an additional $1.6 billion to spend when they draft a new two-year state budget. But GOP leaders warn that the amount won’t cover requested agency projects and capital needs. And an economic forecast predicted a mild recession will begin in the first quarter.

Mishler, the chairman of the Senate Appropriations Committee, said that while Indiana “remains on sound financial footing,” economic growth is estimated to slow — meaning tough spending decisions for budget writers.

“While we have new money to spend, the agency requests to the State Budget Committee exceed that amount. Those requests do not include K-12 tuition support or increased Medicaid costs. We also have over $1 billion in capital project overruns from the 2021 budget,” he said in a statement.

“As we look toward our next state budget, I am confident that we can continue to make investments in the Hoosier state while exercising the discipline necessary to keep Indiana in a fiscally sound position,” Mishler continued.

Meanwhile, Indiana’s governor won’t yet say how much he wants to spend on education, but noted that “we’ll find ourselves paying more later” if additional allocations aren’t made in the next budget.

“It will be one of my priorities to spend more, but not just spend more to spend more,” Holcomb said.

That includes “doubling, or tripling down” on early childhood education, he said. College and workforce readiness initiatives, as well as credentialing programs, “that lead somewhere” for highschoolers are also top-of list for the governor.

Holcomb continued that “we’ve made progress” on teacher pay, and said he plans to work with school corporations and superintendents to “continue the upward trajectory” on salaries.

But Holcomb said he’s largely waiting until the April 15 revenue forecast — released near the end of the legislative session — to make firm decisions on specific funding requests.

“There’s some other fiscals that we have to balance with this,” he said. “But you’ve got to be nimble, and you’ve got to be willing to right-size, whether true up or true down, when you get to April.”

Indiana Capital Chronicle is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Contact Editor Niki Kelly for questions: info@indianacapitalchronicle.com.

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